ASSOCIATED BUS. TEL. SYS. CORP. v. DANIHELS

This is a diversity action between plaintiff, Associated Business Telephone Systems Corporation ("ABTS"), whose principle place of business is in New Jersey, and defendant, Leo J. Danihels, who is domiciled in Nevada. The parties are presently before the court upon motion of defendant to dismiss the complaint for lack of subject matter jurisdiction and for lack of personal jurisdiction. In the alternative, defendant seeks transfer of this action to Nevada pursuant to the doctrine of forum non convenience.

The Inn experienced financial difficulties and defendant, a secured creditor of Wright and the Inn, was appointed Interim Receiver of the Inn on January 14, 1992. In addition to the usual powers granted to receivers, defendant was specifically vested with the power to manage the Inn, to collect rents and profits, to pay expenses, and to maintain and preserve the Inn pending foreclosure proceedings. Shortly thereafter, ABTS notified defendant that the Inn was approximately $ 14,000 in arrears for payments due under the Contract and that the telephone system was therefore scheduled for disconnection unless defendant remitted the outstanding debt.

Defendant sent ABTS $ 4,042.57, and ABTS agreed not to have the system shut down. Plaintiff alleges that defendant promised that he would be bound by and make all payments due under the Contract during the period of receivership. Plaintiff also maintains that defendant stated that he could not as receiver assume the Contract, but, if defendant was successful in taking over the property as second mortgage holder after foreclosure, he would assume the contract at that time. Defendant purchased insurance and began making the monthly payments.

ABTS further alleges that sometime later during the receivership, ABTS again sought to terminate the Contract because the original arrearage was still outstanding, because defendant had yet to assume the Contract, and because the foreclosure was taking much longer than defendant had initially predicted. ABTS maintains defendant responded by assuring ABTS that he was definitely going to take over the Inn following foreclosure. Based upon such representations, ABTS states that it continued to perform under the Contract and upgraded the system at a cost of $ 15,000 to $ 20,000.

Defendant subsequently failed to pay the invoices for the months of June and August 1992, which amounted to $ 8,638.66. These latter invoices were not paid because of a dispute between the parties over whether the defendant'S original $ 4,042.57 payment was a good faith deposit to keep the phones operable or should have been credited to the monthly invoices as they came due. On August 4, 1992, the Inn was sold at a trustee sale and acquired by someone other than defendant. After the sale, defendant sent ABTS two payments totalling $ 4,596.09, representing the difference between the monies defendant believed should have been credited to his account and the remaining balance of the June/August invoices.

ABTS instituted this action alleging breach of contract, conversion of the unremitted funds, and fraud. Defendant moves to dismiss contending that ABTS cannot meet the requisite jurisdictional amount in controversy and for lack of personal jurisdiction.

DISCUSSION

I. Amount in Controversy

This court has jurisdiction over diversity actions only if they involve more than $ 50,000 in controversy. 28 U.S.C. § 1332. Although the complaint alleges more than $ 50,0000 in damages, defendant argues that in fact the amount in controversy is much less.

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